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IDATE provides regular analyses of the main trends shaping the world’s mobile markets: networks, devices and services. On the occasion of the LTE World Summit in Amsterdam (17-18 May 2011), IDATE has released its LTE Forecasts.

LTE pricing: towards combinations of monthly caps, speeds and QoS?

The pricing of mobile data services is getting ever more sophisticated with the availability of a large variety of devices:• Dongles and PC with embedded LTE modem• Personal hotspots/ mobile hotspots• Smartphones, sometimes including a hotspot software feature• Tablets• Connected devices, such as eReaders and portable game consoles• M2M (Machine-to-Machine devices)The pricing for the hotspot software feature associated with a smartphone is often billed by the mobile operator as a ‘tethering’ option.

The raft of new tariff packages for LTE are benefiting from the capacity of new networks. They tend to be based upon various combinations of the following parameters:• Monthly subscriptions for postpaid packages, ranging from EUR 40 in Germany to EUR 90 in Austria• Monthly caps: up to 30 GB per month for TeliaSonera in Sweden or A1 Telekom Austria. This is a significant shift compared given the monthly caps applied to 3G (2 GB per month is often imposed). In the USA, the cap is in the 5-10 GB range and 5-7 GB in Japan. Caps of 4G are mainly driven by competition issues and the saturation level of 3G networks.• Downlink speeds: Vodafone Germany proposes a dedicated package with downlink speed of (up to) 50 Mbps. Here, it is right to urge caution on the part of MNOs when advertising maximum data rates as customers as observed speeds might drop well below this level.• Quality of service: ‘premium’ subscriptions dedicated to business customers provide QoS prioritisation during peak hours for data traffic. This is being implemented by Vodafone in Europe on its 3G networks after a successful introduction in Spain.• Time of day (peak/off-peak hours): in order to shift usage to off-peak hours, some mobile operators are introducing this differentiation on their 3G networks • Range of OTT (over-the-top) services such as unlimited access to social networks, authorisation to use VoIP client on the smartphone and authorisation to use P2P applications• Various other options including a hot-spot option on smartphones, and tethering The more innovative packages tend to combine two or more of these parameters: in Germany, Vodafone proposes a combination of monthly caps and downlink data rates for its LTE service.

Customer experience is a key element when users select 3G or LTE service plans: the latter not only provide higher speeds but also reduced latency which, according TeliaSonera, is a major improvement on 3G performances.In the months ahead, new forms of bundling (of the type of mobile broadband with television service, or fixed-line telephony) may well emerge, as might new revenue sharing models. Further, one could see various forms of split billing between the MNO and the content provider being implemented.Global LTE forecasts

IDATE predicts that, in 2015, there will be 371 million LTE users worldwide. Based on modelling results and considering the case of an MNO already operating GSM and 3G networks, the total cumulated investment for the LTE RAN overlay deployment from 2011 to 2018 will come to 335 million EUR. We will see a great many new smartphones and connected devices (dongles, tablets, connected laptops, routers…) coming onto the LTE market in 2011. It will be the US and Asia that drive LTE growth overall, while TD-LTE will take off in China and in India in the near future.Innovative services and business models, such as investment/revenue sharing, and VoLTE which can bring benefits to both operators and subscribers, need to be deployed if operators are to maximise the potential of LTE deployments, maintain ARPU levels and have their network continue to be a smart pipe.Frédéric Pujolf.pujol@idate.org

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